Jennalyn Alunan
Managerial Economics
Wednesday, February 25, 2015
Assignment #2

Vans Shoes
Vans shoes were introduced in 1966 out of Los Angeles County, California by Paul Van Doren, hence the name Vans. It is considered a market leader amongst the skateboarding market, and is considered to be a niche product in the athletic shoe market. Vans regional strengths are the West Coast while maintaining international strengths through their distribution in over 50 countries as well as through the Internet. Since Vans shoes has been in business for nearly 50 years their Product Lifecycle has varied. The Product Lifecycle of Vans Shoes now is at the maturity stage, where sales grow at slowing rates and finally stabilize. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit. Growth in the Americas, representing about 70 percent of total revenues in 2011, will account for nearly half of the anticipated $1 billion in revenue growth. With balanced growth across both wholesale and direct-to-consumer channels, a key focus will be expansion outside Vans’ core West Coast market. Major metropolitan areas such as New York City and Mexico City, where Vans has demonstrated great success, will be utilized as epicenters to drive brand awareness. In EMEA (Europe/Middle East/Africa), Vans expects to add $350 million in revenues by 2016. This follows a year of exceptional growth in 2011 when Vans achieved 55 percent constant dollar revenue growth in the region. Building on successful strategic execution in the United Kingdom, Vans outlined how investments in social media, traditional advertising and grassroots events will serve as a catalyst to drive continued growth across Europe. Asia Pacific (APAC) is expected to be Vans’ fastest growth region with its largest opportunity concentrated in China. Accounting for 8 percent of the brand’s revenues in 2011, APAC revenues are expected to nearly triple by the end of 2016, adding $170 million in growth. -Jun. 14, 2012-- Vans, the original action sports footwear and Apparel Company, today provided details on its strategy to add $1 billion in revenues over the next five years. At an investor meeting held at the House of Vans in Brooklyn, N.Y. – a 24,000 square-foot skate park and event space – Vans announced that it expects revenues to reach $2.2 billion by the end of 2016, representing an annual growth rate of 13 percent. Vans is a wholly-owned subsidiary of VF Corporation (NYSE: VFC). Demand
The typical consumer for the Van’s line of athletic shoes would be a younger adult that that is in or has just recently graduated either high school or college, but don’t have the intention of going beyond and getting a bachelor’s degree. Their priorities are in music and the newest technology for computers and gaming systems, but they also have a significant interest in outdoor activities. They usually shop at surf shops or sports shops like Zumiez, Pac Sun, or more local surf shops. They do not like shopping at Foot Locker or Big 5 for their shoes. These people look for a shoe that will fit their versatile life. They don’t want to break their budget when they go shopping for their shoes and they need a shoe that can allow them to shred in the park, but also wear around town as a casual addition to their stylish personality. The target consumer described is creative, outgoing, stylish and young. Personality Profiles: Kyle is from Hawaii and is a dedicated Vans consumer. He likes to long board, snowboard, cliff jump, surf, party and hang out with his friends from his garage band. He has dirty blonde, shaggy hair, is 20 years old and in college. He wears loose fitting jeans, a shirt he picked off his floor as he was running out the door. He listens to reggae, old school rock and sometimes rap. He drinks corona and lime and parties pretty hard on the weekends. He mainly shops at places like Zumiez and local skate or surf shops. Skye is from California, is 20 years old and in college. She likes to go to the beach with her friends, smoke pot and listen to more alternative music on the radio. She creates her own art and shows it on her self-made shirts. She is all around down to earth, natural looking and wears dark boot cut jeans. She shops mainly at thrift stores but when she wants to splurge her goes to places like Pac Sun or local surf shops. Supply
Vans, the original action sports footwear and apparel brand deeply rooted in youth culture, has a vested interest in protecting the planet and enhancing global communities for future generations. Vans understands that our roots in action sports including surfing and snowboarding depend on a healthy environment. Vans is committed to sustain these essential environments by reducing the ecological footprint of our operations and products. We also remain dedicated to keeping the Van Doren spirit alive by supporting and enhancing the communities in which we work. Vans understands that our commitment to community extends to our supply chain as well. Suppliers must meet strict social, environmental and ethical standards established by VF Corporation. As a part of the VF sourcing and supply chain organization, we benefit from the company’s expertise in conducting audits and demanding compliance with strict standards across the vast supply chains of all of its brands. While the focus of our audits is social compliance, we added an environmental component in 2008 that covers management practices relating to energy use, water use, hazardous materials management, worker safety, regulatory compliance, and wastewater discharges.
In 2012, Vans conducted a waste audit of our corporate headquarters. We learned that despite having a recycling program, we're still sending a significant amount of waste to landfill. We established a goal of diverting 50% of our waste from landfill by the end of 2014. Here are some of the efforts we are taking in order to reach our goal: * Implemented a new waste system throughout all Vans office buildings to include containers with descriptive signage for efficient waste disposal. * Filtered tap water stations installed throughout corporate headquarters to eliminate use of disposable plastic water bottles. New employees receive a coffee mug and reusable water bottle at orientation. * Created an operational sustainability scorecard with goals relating to: energy use, waste diversion and paper use.
Vans’ Santa Fe Springs Distribution Center is in the top 25% of distribution centers worldwide for energy efficiency as rated by the Energy Star rating system. In 2013, it became a zero waste to landfill facility. This means over 95% the waste from the distribution center is recycled and the remaining waste is diverted to a waste-to-energy facility. Here are some of the ways we accomplished this: * Recycling over 1,600 tons of waste each year, thereby reducing waste to landfill. * Vans recycles more than 8,000 lbs. of cardboard each day, saving enough energy to power the average American home for more than 7 months! * The Box Reuse project, a comprehensive program aimed at reusing as many inbound shipping boxes as possible for outbound shipping, saves more than 120,000 lbs. of cardboard each year. * Donating recycled cans to local charities.
The newly opened Vans Mexico City Distribution Center is certified to the LEED standard, an internationally recognized green building certification system which provides third-party verification that a building was designed and built using strategies aimed at increasing performance, reducing waste, and improving quality of life. Vans operates over 302 retail stores in North America with over 1.3 million square feet of space. As such, our retail stores represent the largest opportunity for us to reduce our operational environmental impact. Here are some of the ways we’ve worked to achieve this: * In 2012, Vans began installing new energy efficient LED track lighting for all new and remodeled stores. The LED fixtures use over 40% less energy compared to previous fixtures. * In 2013, Vans began selling a reusable shopping bag, with the proceeds benefiting the skate foundation. To date, we’ve raised over $185,000 through the sale of this bag and saved approximately 12,000 lbs. of plastic. In 2014, the proceeds from the sale of our reusable bag will benefit Surfer’s Healing.
Vans believes we have established a solid foundation in minimizing the environmental footprint through our Green Sole Operations program. We know we have more work to do! Therefore, Vans is committed in continuing to implement best practices and technologies to reduce the amount of energy we use and the waste we create in our operations. In the near term, our priorities include: * Continuing to increase waste diversion at our headquarters so that we are on par with industry leaders. * Implementing waste and energy reduction goals for our retail stores. * Implementing a comprehensive recycling strategy at our retail stores.
So what’s next? Vans Shoes wants to extend the Van Doren Spirit outside our walls, Vans will continue to enhance our Street Sole programs. Specific actions include: * Measuring and setting goals to increase the number of employees who use their paid-volunteer hours. * Improving the communication of our Street Sole programs, both internally and externally.
Price
The product price range can be anywhere from $30-$65 for an in store show while a custom shoe can cost up to $200. Conducted store checks online through Tilly’s, Journeys, Zappos, and Zumiez online stores. There are some competitors out there that are trying to compete with Vans most famous styles of shoe, Vans Authentic. Airwalk is a surf, skate, and snow company that is primarily sold in shoe stores such as Sears and Payless. The main purpose of Airwalk is to provide lower class consumers to be able to have the same style and look as the more priced shoes. The quality is not as great, but the price is set so many can afford them. Keds ($35.00) is one step up from Airwalk ($19.99), they sell their shoes in the same places as Airwalk and several more places, like Kohl’s and JC Penny’s. Keds is not geared to the sporty segment, however they do have a shoe that is similar that many people purchase because I does look similar but is cheaper than Vans Authentic. Below is a comparison between the three companies. These two companies maybe future competitors because their prices are cheaper. Airwalk has a bigger potential of consumers leaving Vans to purchase Airwalk, because they have a very similar target audience. And if price is one of the main factors for consumers they may end up choosing Airwalks. With the many competitors that are out on the market, Vans can analyze their loyal consumers and their potential consumers to find out why make them choose Vans over other companies. By Vans recognizing their competitors marketing mix, this will help them with their own marketing mix and positioning strategy. If Nike’s approach is more commercial, ads, and celebrity based, Vans can analyze how their athletic events compare to using commercials and what marketing strategy works for their target segment. Financial information for Vans is quite hard to come by, however industry experts estimated their revenue last year to be around $750 million. This makes our 5% increase in sales difficult to figure out how much profit that will actually be. However, we can estimate and say that a 5% increase to those sales would translate to an increase of $37.5 million in sales. Our total expenditures for the promotional plan are $442,500; therefore if we were to meet our goal of increasing sales by 5%, our return on investment would be over 8,000%. The only way this would be viable for this marketing plan, is if the tools are in place so that this increase in sales can be traced to one of our three objectives over the two quarters. If we can trace all sales to our promotional plan, then this plan needs to be implemented because it will reap huge rewards for Vans. As with any project the best course for action when following up is to make sure you have sufficient data from before the promotional plan, during the promo plan, and after the promo plan has concluded. Using this information it will be possible to analyze and figure out what parts of the promotional plan had holes, what failed, what worked well, and how, overall, all the elements interacted together and what that outcome was. For this particular promotional plan, resources must be in place to determine where each consumer heard about our product, or what pushed them into actually going out and purchasing our product.

Cites:
"VF Corporation - Press Releases." VF Corporation - Press Releases. N.p., n.d. Web. 02 Mar. 2015.
"Vans | Shoes, Clothing, News and More | Shop Now." Vans | Shoes, Clothing, News and More | Shop Now. N.p., n.d. Web. 02 Mar. 2015.